Complete, accurate and timely information is at the heart of effective decision-making within every treasury department. Integrating systems and connecting to banks plays a key role in having cash visibility across an organization. A recent white paper, Treasury Technology – Six-step Guide to Gaining Sophistication Through Simplification identified streamlining bank connectivity as a key step to simplifying treasury. Few corporations operating internationally are able or willing to work with a single cash management bank. Similarly, many companies initiate payments and retrieve information through different business units and systems. Just because cash is held with, or payments are made through different banks or systems, the needs are the same – to exchange transactions or information quickly, securely and efficiently. This is not easy when dealing with multiple internal systems and/or multiple banks however, particularly as each bank and system will often format data in different ways.
While there are answers, there is not simply one answer. Just as companies have distinctive organizational structures and technology infrastructures, they often have different needs and preferences in the way that they communicate with their banks. For multinational corporations with a large number of banking relationships globally, SWIFT is often the preferred choice as a bank-neutral, multi-bank channel. For other treasuries, where cost or implementation constraints might preclude the use of SWIFT, other options such as web-based electronic banking systems, host-to-host connectivity or country-specific connectivity protocols such as EBICS may be more appropriate.
The problem is that treasurers rarely have the time to explore, decide on and implement the “right” connectivity choice, and often they don’t have the resources either. Furthermore, as the business changes, such as through mergers, acquisitions or dispersals, companies’ banking and connectivity needs are also likely to change, often significantly. Treasurers and finance managers increasingly recognize that the objective is to facilitate the exchange of transactions and information that enables them support the business.
Consequently, there is now a strong trend towards outsourcing bank connectivity to expert partners, leaving treasurers to focus on the underlying flows, balances and exposures, rather than the channel that they pass through. This is a compelling proposition that takes the onus off treasurers to decide and implement on the “best” connectivity choices for their business, and concentrate instead on the results.
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